SGQ - record hit from South America's largest, highest grade hard rock rare earth project

Our rare earths and niobium Investment St George Mining (ASX: SGQ) just hit the biggest intercept yet from its project in Brazil.

178.7m at 4.34% total rare earth oxides and 0.75% niobium - all from surface.

A new record from what is already the largest and highest-grade carbonatite-hosted rare earth deposit in South America...

... and the second highest grade REE deposit globally in the Western world.

SGQ’s project is comparable to the two biggest hard rock carbonatite assets in the world - both of which are currently in production and owned by $13BN MP and $20BN Lynas.

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That comparison is only for the rare earths - SGQ’s niobium resource also compares well in terms of grade to the three operating mines globally too.

Including its neighbour CBMM’s asset which produces ~80% of global niobium supply - here is where that asset sits relative to SGQ:

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SGQ put out an upgrade on its resource in early March, and already has 31 holes that have been reported but not included in that last estimate. (source)(source)

And then there are results like the ones announced today all sitting outside of the current resource estimate.

SGQ is currently running a 24/7 drill program with four rigs - so we could see SGQ’s project get a lot bigger over the coming months - SGQ expects to upgrade its resource again in Q3. (source)

SGQ is also working on downstream processing for its deposit

Having one of the biggest hard rock carbonatite rare earth as well as high grade niobium resource means SGQ’s project is one of the ones that would be at the top of watchlists all over the world.

Especially from those corporate/government offtakers who are looking to see where they can get secure supply from.

The kicker for SGQ is that the company is already working on downstream processing to go with the size/scale of its resource.

So the asset is being de-risked technically for anyone who may be watching.

Beyond total TREO, what matters for the rare earths market is the NdPr content - the critical input for permanent magnets used in EVs, wind turbines, defence systems, and AI infrastructure.

SGQ’s project has an NdPr ratio of ~20% (and as high as ~26% in recent drilling results).

And right now SGQ has processing alliances in place to see if its ore can be turned into magnets with:

• REAlloys (US) - fast-growing mine-to-magnet operator with major US government contracts, Testing SGQ’s rare earth product to see IF it meets specifications for US military-grade permanent magnets
• MagBras (Brazil) - part of an initiative backed by Stellantis to build Brazil’s first permanent magnet facility, SGQ has delivered bulk samples of rare earth oxalates to establish a domestic supply chain and qualify as a primary feedstock provider.
• Tecnicas Reunidas (Spain) - leads the EU’s PERMANET project covering 12 countries; Applying proprietary technology to SGQ’s ore samples to design an optimal chemical flowsheet.

And on the niobium side (which we think the market isn’t really factoring into the SGQ story):

• SGQ signed a deal with US based Boston Metal - to trial its next generation processing tech (Molten Oxide Electrolysis (MOE) niobium processing technology) on its niobium resource, to produce niobium from SGQ’s deposit.

Boston comes out of MIT uni in the US, and is backed by BHP, BMW, Microsoft, Vale and more…

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Boston is also led by Tadeu Carneiro who actually worked for CBMM for nearly 30 years including 10 years as CEO...

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We covered the niobium processing deal in detail in our last SGQ note here: SGQ: Rare earth and niobium in Brazil - USA deal to secure control over Brazil rare earth production.

What we want to see next from SGQ

🔄 Drill results from expansion drilling

SGQ has 4 rigs turning 24/7 at its project right now.

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The last update out of SGQ said that ~44 expansion holes had been completed that AREN’T in the current resource estimate.

We are hoping the current drill programs lead to another resource upgrade on the project later this year.

(SGQ has mentioned it is targeting another upgrade in Q3).

🔄 Downstream processing updates - now on FOUR fronts

Here are the processing pathways we are tracking:

• 🔄 REAlloys (US) testing SGQ’s rare earth product for US defence magnets
• 🔄 Nanum Nanotecnologia (Brazil) for its rare earths
• 🔄 Tecnicas Reunidas (Europe) for its rare earths
• 🔄 Boston Metal (US/Brazil) for its niobium resource.

We also note SGQ:

• Has signed an agreement for a joint pilot plant trial (building on a prior 9-month trial that successfully produced rare earth product at over 99% purity with 86% recoveries)
• Is participating in the MAGBRAS Initiative - a program with major automakers like Stellantis working toward building Brazil’s first permanent magnet-making facility

Beyond all of that, we are also looking out for the following (specifically that economic study):

(source)